In the category of the most widely released movies for 2006, the most profitable movie of the year was surprisingly "Ice Age: The Meltdown," which beat out what most thought would be the leader "Pirates of the Caribbean: Dead Man's Chest."
The report, which was released by Kagan Research, estimated that the costs of "Ice Age" was around $256.4 million and the total revenue was $1.1 billion through all outlets. The result is that they garnered a score of 4.11 on the Kagan Profitability Index.
The No. 2 finisher "Pirates," was produced at a high $423.8 million with revenue r
eaching 1.7 billion, which ended up being a result of 3.93 on the KPI. The results are determined by dividing the revenue by the production costs.
While "Ice Age" was the most profitable, "Pirates" was ahead of it in most other categories like the number of DVDs sold which were an estimated 15.1 million in the U.S., whereas "Ice Age" was a lot behind that with 8.4 million sold. "Pirates" also had revenues of $423 million at the U.S. box office while "Ice Age" finished with $195 million.
The other finishers among the top five most profitable movies for 2006 were Sony's (SNE) "The Da Vinci Code" (KPI of 3.81), Fox's (NWS) "Borat" (3.75) and Lionsgate's "Saw III" (3.48).
One other impressive statistic for profitability for 2006 was that 4 out of the top 10 most profitable films were animation offerings, which including "Ice Age" were Disney/Pixar's (DIS) "Cars" (No. 8), DreamWorks/Paramount's "Over the Hedge" (No. 9) and Warner Bros.' (TWX) "Happy Feet" (No. 10).
Kagan's analysis of film profitability is among the best. However, one limitation is that several categories of production cost are not included. (This is understandable because items like residuals or allocations of studio overhead are very difficult to estimate.) As a result, I am not sure that the KPI score is really all that useful. I suspect from a margin perspective, Little Miss Sunshine would be ranked highest. In terms of gross profit in dollars, Pirates is likely the winner.
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Posted by: Film Funding Blog | January 21, 2007 12:22 PM | Permalink to Comment